Honda website
Honda website

AUGUST 3, 2005

Button's sabbatical year

Reports that Jenson Button could spend a year on the sidelines of F1 should not be taken too seriously. It is true that there are times when there are contractual disputes which result in those involved not wanting to respect the terms of their contracts. It is also true that a person cannot be forced to do something they do not wish to do, even if there is a contract in place.

However, there is a fairly major drawback to this position, as those who breach a contract can be judged to be liable to pay damages to the injured party.

Button can choose to sit out the 2006 season if he wishes to do so but there are several reasons why this does not make sense: BAR is hardly going to be happy to see Jenson sitting on the sidelines when it wants to see him driving a BAR-Honda. Drivers need to keep up to speed and taking a year away is not a good way of doing that, as Jacques Villeneuve showed recently.

In addition to that Button must be prepared to face the possibility of legal action from Williams because the team could (and almost certainly would) argue that Jenson is a very marketable driver and an attraction to British sponsors and thus has a clear financial value to the team. There may even be deals in place which are based on Button's presence at Williams. The team will not say if this is the case or not. At the same time Williams cannot replace a driver of Button's level at this late stage and if Button does accept to pay damages he will have to add in the fact that Williams would not only be losing an asset, but that asset would also be going to a rival team. And that could have an effect on the team's earning potential in terms of prize money.

The good news for Button (there is some) is that under British law damages can only be in payment for direct damage done and cannot be punitive, in other words he would only have to pay for the trouble he causes rather than being fined if it is ruled that he broke the agreement.

The fear in the Button camp is that some of the deals that may be involved could be of long duration and that Button's desire to leave could result in the loss of such sponsorship. A $10m sponsorship over five years (which is not huge in F1 terms) would mean that Williams might be able to claim $50m from Button, which would be a huge amount of money for a driver to have to pay. And there could be multiple sponsorship deals affected.

The other question that has not really been examined in the reporting to date is the status of the Williams-Button contract for 2006. Formula 1 contracts and indeed options have to be lodged with the Contract Recognition Board. If the Button-Williams deal is already registered and Williams refuses to back down, Button has to do a deal because BAR cannot lodge another contract with the board without expecting a challenge from Williams. And if that were to happen there would be a danger as BAR would be laying itself open to suggestions that it was trying to induce Button to swap teams.

All things considered, it is clear that Button's position is legally weak and all the current noise may simply be to test the resolve of Williams. Sir Frank Williams gave a very clear response in Hungary to Button's initial remarks about not wanting to join the team and there will, no doubt, be some reaction to the talk of Button sitting out the 2006 season.

The next step for Button would be to make Williams a financial offer to try to get the team to agree to release him. That would cost a great deal of money because there is no obvious alternative to Jenson. The other option is to accept that a deal is a deal and to drive for Williams in 2006 and 2007.

What is most interesting in all of this are the numbers involved. We believe that Button's deal with Williams will pay him in the region of $16m for a two year contract. That is a decent sum of money for a man who has yet to win a Grand Prix but the whisper from BAR Honda is that the team is willing to sign Jenson for five years and pay him $88m in the course of that deal.

This is no doubt very attractive to Button and perhaps the best explanation we have for his attempts to change his future at short notice. There may be arguments about the performance of the teams involved but one might not be wrong to suggest that the real question is financial.